Washington State’s Interpretation on Alarm Monitoring Taxation Questioned

Issue: Movement by the state of Washington to start charging sales tax on monitoring.

Recent audits by the Washington Department of Revenue (DOR) in Washington State have raised questions about an Excise Tax Authority (ETA) issued on March 7, 2014 regarding the sales tax implications for alarm monitoring companies and dealers.  At the center of the interpretation is the definition and application of a “Digital Automated Service” or DAS, which is subject to sales taxes.  DAS is defined as “…any service transferred electronically that uses one or more software applications . . .”  As explained in the ETA, an exception to a DAS is for services that require “primarily human effort.”

The ETA then proceeds to provide three examples with calculations that it used to determine if the “primarily human effort” exception applies.  In the first two examples the DOR indicated the alarm monitoring would be subject to sales taxes, yet in the third example, the DAS exception for “primarily human effort” would apply.  In reality, all three examples point to the same type of monitoring service, yet they are interpreted differently in the ETA.  Consequently, DOR audits of alarm monitoring companies have resulted in different determinations, subjecting at least one alarm monitoring company to sales taxes for all monitored accounts, and being subject to back taxes (and penalties) for up to three (3) years.

All alarm monitoring companies and dealers who operate in the State of Washington are urged to review this ETA carefully and seek the counsel of your tax advisor.  Efforts are underway with ESA and TMA members in Washington to work with the DOR and prevent inconsistent determinations from individual audits in the future. We will post updates on the TMA blog in the coming weeks.

 

 

Annual AICC Communications Survey Open Now

For the sixth consecutive year, AICC Chair Louis T. Fiore is coordinating the annual AICC Communications Survey. “The results have been used to inform regulators of our [industry] communications needs,” he says. “It only works if the response is robust. So please participate!”

This survey focuses on the percentages of monitored accounts using POTS (plain old telephone systems), VoIP digital dialers (DACT), or other technologies either as a sole method of transmission or in conjunction with another technology. The ten-question survey will take no more than a few minutes to complete. Participation is not limited to TMA or AICC members — industry-wide input will strengthen the findings. Input is anonymous and individual answers will be kept confidential.

Find the survey at https://www.surveymonkey.com/r/R9SH7JC

Fiore will share results following the August 11 closing of the survey.

Change in California ACO Licensing Requirements

The California Bureau of Security and Investigative Services (BSIS) recently made a significant change to their alarm company operator (ACO) licensing requirements. In order to obtain or renew an ACO license with CA BSIS, they now require that the company provide an in-state address. According to the bureau, the reason for this change is to ensure that the bureau has the ability to inspect records without traveling outside the state of California. A residential or commercial address is acceptable. There is no exception granted for out-of-state monitoring companies.

Thank you to Kate Fisher of new TMA member Compliance ManagHead shotement Solutions, LLCa company that provides clients in the electronic security systems industry with a customized and cost effective solution for managing their compliance needs, for forwarding this information to TMA.

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Rochester/Monroe County’s Merklinger Recognized for Efforts to Advance ASAP in New York State

John M. Merklinger, Director of the Rochester/Monroe County 911 Center and 311 Call Center, was awarded The Monitoring Association’s 2017 Public Sector Award at the 2017 Electronic Security Expo (ESX) Public Safety Luncheon on Friday, June 16, at Music City Center in Nashville. This special honor is given by TMA in recognition of a public sector individual’s contribution to the alarm industry. TMA Executive Director Jay Hauhn presented the award.

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From left: Jay Hauhn, John Merklinger

“New York State was projected to be one of the last states to implement ASAP due to the states unique IT infrastructure,” said Hauhn. “Merklinger, who understood the value ASAP would bring to his center, spearheaded an effort by New York PSAPs to work with the state police to have the needed changes to the state CJIS network funded, scheduled and successfully completed.”

Read more about John Merklinger’s efforts on behalf of the ASAP program.

Custom Alarm Recognized as a Best Place to Work in SE MN in 2017

Custom Best Places to WorkTMA member Custom Alarm, a locally owned and operated company located in Rochester, MN with its own UL listed Monitoring Response Center, has been named one of Southeast Minnesota’s Best Places to Work. The “Best Places to Work” awards program was a commissioned study by Workforce Development Inc. The purpose of the program is to recognize some of the best employers in the local area and provide vital information to companies about the practices they use to attract and retain employees. Each participating company completed a survey that allowed their employment practices to be analyzed by a consulting firm. The data was measured on such parameters as: turnover, rate of growth, promotion rates, employee evaluations and feedback, percentage of employee injured, diversity of management, benefits offered, training expenditures, paid days off and increase in pay.

Custom Alarm excelled in many surveyed areas. It has a 12.5% Employee Turnover Rate which is 9.5% lower than the survey average for small businesses. Custom Alarm spent an average of $1,236 on employee training and development, provided each employee with 16 hours of paid time off to volunteer in the community, and has an 85% participation rate in 401k voluntary retirement program.

Custom Alarm was started in 1968 with only three employees and has grown to over sixty, specializing in fire alarm systems, intrusion, video surveillance, and access control for both residential and commercial owners.

alliantgroup Joins The Monitoring Association, Offers Gratis Assessments to TMA Members

TMA welcomes alliantgroup, a nationwide tax consultancy and the nation’s leading provider of R&D tax credit services, as a new Associate member. alliantgroup is a specialty tax services consultancy that ealliantgroup Logo_CMYK_Blue_Greyxists to help U.S. businesses and their CPA firms identify and properly claim all available federal and state tax incentives which are intended to help businesses grow and successfully compete both in the U.S. and abroad. Headquartered in Houston, Texas and with offices in New York, Boston, Chicago, Sacramento, Orange County, Indianapolis, Orlando and Washington, D.C., alliantgroup has helped businesses from across the nation claim over $5 billion in tax incentives.

“We are pleased to welcome alliantgroup as a new Associate TMA member,” said Jay Hauhn, TMA Executive Director and CEO. “alliantgroup’s unique service will be of great benefit to our member companies. We also look forward to their participating at the TMA Annual Meeting this October, during which Dean Zerbe, former Senior Counsel to the U.S. Senate Finance Committee and current National Managing Director of alliantgroup, will share a legislative and tax update that will outline what our businesses and business owners need to know about tax reform and other economic issues.”

TMA members are often excellent candidates for a number of federal and state tax incentives. Among the most valuable of these incentives includes the federal Research and Development (R&D) Tax Credit—a dollar-for-dollar tax credit that generates an estimated $10 billion annually for U.S. businesses.The R&D Tax Credit is designed to specifically reward companies for making technical enhancements to their products or processes—or in the case of many TMA members and security system integrators, the technical work and experimentation that is done to ensure multiple systems communicate with one another. The integration of multiple systems within a facility is traditionally a necessary practice in the development of a broader security system, and as a result of such technical activities, TMA members are often times some of the absolute best candidates for the credit.

“I am extremely proud to be part of a top-flight organization such as TMA,” said Dhaval Jadav, alliantgroup CEO. “I look forward to working with their members and introducing them to the credit and incentive opportunities available to their membership.”


Exclusively for TMA members, alliantgroup is offering gratis assessments to business owners and executives, in which they will identify the amount of tax credits your business could be looking at this year, which could translate into cash refunds. To learn more, contact Jennifer Groff, at jennifer.groff@alliantgroup.com or 713-552-5657.  [LEARN MORE]

 

Vivint SmartHome is TMA 2017 Monitoring Center of the Year

Dynamark, Safe, and CRC Honored with Personnel Awards

TMA is pleased to announce the winners of the 2017 Monitoring Center Excellence Awards:

  • Monitoring Center of the Year: Vivint SmartHome
  • Monitoring Center Operator of the Year: Craig Pierce, Safe Systems
  • Monitoring Center Manager of the Year: Keith Godsey, Dynamark
  • Monitoring Center Support Person of the Year: Laura Jacobson, Cooperative Response Center

“The companies and individuals chosen as winners this year are shining examples of how seriously the monitoring industry takes its responsibility to protect life and property,” said Elizabeth Lasko, Vice President of Communications, TMA.

“Our monitoring team delivers a world-class security experience, in conjunction with our state-of-the-art smart home solutions that delight our customers every day,” said Steve Dixon, senior vice president of customer experience and operations at Vivint Smart Home, in a press release. “We’re thrilled to be recognized by the profession’s leading trade association, TMA, for the work we do to keep our customers’ homes and families safe and secure.”

“We congratulate our winners for being recognized as the best of the best,” Lasko continued. “Our judges related how very difficult it was to choose the finalists, let alone the winners, from all the nominations. The applications that were submitted all told powerful stories of service, innovation, corporate culture, and the desire to constantly improve.”

“Each nominee must submit an extensive application detailing company systems like disaster recovery plan, education and training programs, technical innovations, and even community outreach,” said Lasko. “In the case of individual nominations, we ask for examples of how these employees go above and beyond their job descriptions to pursue excellence.”

The TMA Monitoring Center Excellence Awards recognize any FM Approvals, Intertek/ETL or UL-listed monitoring center (TMA members and non-members) and outstanding personnel who perform in the highest professional manner, thereby making a significant contribution to the betterment of the alarm industry and the alarm profession while demonstrating exceptional service to their customers and community.

The purpose of the awards program is to:

  • Establish and promote the inherent value of professional monitoring services in general.
  • Honor those who have made the most significant contributions to the service.
  • Promote the distinct level of professionalism attained by NRTL-approved monitoring centers.

The TMA Monitoring Center Excellence Awards Program is sponsored by SDM Magazine, which will publish a feature story detailing the accomplishments of the winners later this summer. Entries are judged by a blue-ribbon volunteer judging panel appointed by TMA. The four winners were announced at the Opening Reception of the 2017 Electronic Security Expo (ESX) on Tuesday, June 13. For past winners and more information, visit www.tma.us.

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